Difficulty: Medium

Average Score: 67%

Which is TRUE?

Rationale

The broker must return the deposit, unless specifically authorized otherwise.

Real estate brokers are typically obligated to return the deposit to the buyer unless they have received explicit authorization to do otherwise. This ensures that the buyer's financial interests are protected and that the broker acts in accordance with the terms agreed upon in their contract.

A (The broker must negotiate for her commission out of the deposit.) YOUR ANSWER

This statement is incorrect because the broker's commission should be predetermined and outlined in the agreement with the client, rather than negotiated from the deposit. The deposit serves a different purpose, primarily as a sign of good faith in the transaction, rather than a source for commission payment.

C (The broker may subtract one-half of her commission before returning the deposit.) YOUR ANSWER

This choice is misleading since the broker cannot arbitrarily deduct any portion of her commission from the deposit without proper authorization. The entire process regarding the deposit and commission needs to be transparent and agreed upon in advance, ensuring the buyer's rights are maintained.

D (The broker has earned a commission and may automatically subtract the entire amount before returning the balance of the deposit to the buyer.) YOUR ANSWER

While a broker may earn a commission once a sale is completed, they cannot automatically deduct this amount from the deposit without the buyer's consent. Doing so would violate standard practices and could lead to legal complications regarding the handling of the buyer's funds.

Conclusion

In real estate transactions, the broker has a responsibility to return the deposit unless authorized otherwise, thereby safeguarding the buyer's financial interests. Choices A, C, and D misinterpret the broker's obligations and the nature of the deposit in such transactions. Understanding these principles is crucial for both brokers and buyers to ensure compliance with established real estate practices.

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